Report of Foreign Bank and Financial Accounts (FBAR) or FinCEN 114

In addition to your annual US tax return filing responsibility, if you are a US person and have a foreign bank account or are a signatory on a foreign bank account, you are required to file a report called an FBAR or FinCEN Form 114 (formerly known as TD F 90-22.1). This is a separate filing from your tax return, with a filing date of April 15 and an automatic extension of October 15.

The FBAR covers all foreign bank accounts, pension accounts, trust accounts, insurance accounts, which you have a financial or beneficial interest in or signature authority over the account and the aggregate balance of all your accounts exceeds $10,000 at any time during the year.

The deadlines for the FBAR are the same as tax returns – April 15 (with an automatic extension to October 15 for expats). Failure to file FinCEN Form 114 by the deadline can carry a penalty of $10,000 per account.

Please note: The above discussion focuses on individuals, however, entities, such as corporations, partnerships, and trusts are also considered US persons and have worldwide tax and reporting obligations as well, including the FBAR or FinCEN 114.

Did you Know?

Fact Seven

Thanks to FATCA banks must disclose their American account holders to the IRS or local tax authority.

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